“Deposits made to saccos are from net salaries of employees who have already been taxed by the Government. The new levy exposes them to double taxation, which is a burden to thousands of small earners who depend on saccos for soft loans,” said Mr Magee. According to the lawyer, Saccos also contribute to the exchequer through licence fees and taxes to both national and county governments, making the new tax plan unjustifiable. He further argued that since saccos have continued to grow and increase in number since 2010, Sasra could still collect more money from the existing 0.1 per cent tax on deposits instead of seeking to punish already overburdened members with a new tax. “Saccos are private entities registered and established for public good. The role of the Government should be merely to ensure there is a conducive environment for their operation as opposed to making the conditions tougher,” said Magee.
Reasonable costs
He stated that Sasra, being a government agency, should give service to the public at reasonable costs instead of coming up with unreasonable financial obligations. The lawyer submitted that the Bill passed by Parliament allowing the increased taxes on sacco deposits was unconstitutional since it did not involve the Senate’s input.
In its petition, Kuscco is seeking a declaration that the legal notice of the new taxes on sacco deposits was a violation of its members’ rights and should be declared unconstitutional, null and void.
